Unicorn AIM VCT plc (LON: UAV) have given shareholders a gloomy update on Wednesday, which alluded to both political and economic uncertainty as a dampener on business.
The firm’s objective is to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maintaining a steady stream of dividend distributions to Shareholders from the income and capital gains generated by the portfolio.
Shares in Unicorn AIM VCT dipped 0.72% to 137p. 4/12/19 13:02BST.
In the year ended September 30, its net asset value per share fell by 10% to 153.9 pence from 171.9p last year. It did however represent a 6.6% rise from its interim net asset value per share of 144.4p.
The firm held it full year dividend at 6.5p per share, which will please shareholders following the testing market conditions that businesses are facing.
After adding back dividends, the trust delivered a total return of negative 6.6%, compared with a 9.3% uptick last year.
Unicorn said: “The financial year ended September 30 proved to be a challenging period for the Alternative Investment Market and, as a result, the company struggled to make headway, ultimately failing to deliver a positive total return to shareholders for the first time in ten years. Although it is always disappointing to report on a year during which total returns have been negative, it is nonetheless encouraging to note that performance overall was relatively resilient.”
“During the twelve-month period ended 30 September 2019, the FTSE 100 Index delivered a modestly positive total return of 3.2%, while the FTSE AIM All-Share Index fell sharply over the year, generating a negative total return of 19.4%,” the trust continued.
The firm added that the two worst performing investments were life science research software firm Abcam PLC (LON: ABC) which saw its share price fall “quite sharply over the course of the year”.
Additionally, animal feed firm Anpario PLC (LON: ANP), was hurt by an outbreak of African swine fever and the ongoing trade dispute between the US and China. This led to the damaging returns for Unicorn, as mentioned in the update on Wednesday morning.
Waste management firm Augean PLC (LON: AUG) was one of the better performers on Unicorn’s books, with the firm reporting “a continued recovery in its key markets”, the trust explained.
Looking ahead, Unicorn said: “The increasingly volatile political situation in the UK and lack of clear direction has begun to have a negative impact on the UK economy. While high levels of political division and economic uncertainty continue to unsettle UK equity markets, it is likely that the company’s NAV performance may remain volatile.
“This election is scheduled to take place on December 12, 2019 and shareholders should be aware that the outcome may create considerable additional risks to performance. For example, if the vote results in a ‘hung’ parliament, with no obvious prospect of achieving a workable coalition, then it is unlikely the UK equity market will respond favourably.”
Many businesses and consumers are treading cautiously in the lead up to the general election, and at the moment it seems that no party has gained enough ground to make a decisive prediction.
What businesses and consumers will want, rather than another election is certainty over Brexit status and regular updates with negotiations. However legislators at Westminster still seem to be in same stale mate position as they were in June 2016, when it was announced that Britain would be leaving the EU.
